Theron Oliver v. Coca Cola Company, Broadside Services, Inc.

Defendant-appellants The Coca-Cola Company ("Coca-Cola") and
Broadspire Services, Inc. ("Broadspire") appeal the district court's entry of
summary judgment, calculation of damages, and award of attorney's fees and
expenses in favor of Plaintiff-appellee Theron Oliver.1 Oliver sought benefits
under Coca-Cola's long term disability plan, and brought suit after Broadspire and
Coca-Cola denied his initial claim and subsequent appeals. We find that
Broadspire, as a third-party claims administrator, was not the plan administrator,
and accordingly, not a proper defendant. We also find that Coca-Cola acted
arbitrarily and capriciously in denying Oliver's claim, no genuine issue of material
fact remains for trial, and the district court therefore properly entered summary
judgment in favor of Oliver. We affirm the district court's award of damages, and
because the district court did not abuse its discretion, we affirm its award of
attorney's fees and expenses in favor of Oliver.

I. BACKGROUND

A. The Benefit Plan

At issue in this case is the Long Term Disability Income Plan of the Coca-
Cola Company (the "Plan"), an employee welfare benefit plan within the meaning of ERISA. See 29 U.S.C. § 1002(1). The Plan document designates Coca-Cola as
the Plan Administrator. The Plan document also contains a delegation by Coca-
Cola of some of its powers as Plan Administrator to The Coca-Cola Company
Long Term Disability Income Plan Committee (the "Committee"). The Plan
document delegates to the Committee "primary responsibility for the
administration of the Plan, and all powers necessary to enable it to properly
perform its duties," including "the discretionary authority to determine the
eligibility of Participants to receive benefits and the amount of benefits to which
any Participant may be entitled under the Plan." R1-24, Exh. 1 §§ 7.2(b), (b)(3).
The Plan also provides that the Committee "may delegate to the Administrative
Services Provider" its discretionary authority to decide claims. Id. § 7.2(b)(3).
Broadspire is the Administrative Services Provider.

Under the Plan, a claim for benefits involves an initial application, and, if
the claimant is unsatisfied with the result of the initial application, two levels of
appeals. Pursuant to § 7.2(b)(3) of the Plan, the Committee delegated to
Broadspire responsibility for making initial determinations of claims for benefits
under the Plan, as well as responsibility for resolving first-level appeals. The
Committee is responsible for deciding second-level appeals, although in 1995 the Committee delegated to two Coca-Cola employees (the "Delegates") its function of
reviewing final claims.

Under the Plan, a participant who suffers a "Disability," as that term is
defined in the Plan, "will receive" benefits. R1-24, Exh. 1 § 4.1. The term
"Disability" has two definitions under the Plan, one which applies during the first
24 months following the date the disability is incurred, and one which applies after
the first 24 months. During the first 24 months, a Disability is defined as "a
physical or mental illness or injury [that] continuously disables [the participant]
from performing his normal duties for his Employer." Id. § 1.11. This is known as
the "own occupation" standard. After the first 24 months, the Plan defines a
Disability as "a physical or mental illness or injury [that] continuously disables
[the participant] from engaging in any occupation for wage or profit, for which he
is reasonably qualified by training, education or experience." Id. This definition is
known as the "any occupation" standard.

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In addition to ordering Coca-Cola to pay future benefits to Oliver, the court
awarded Oliver unpaid disability benefits and interest totaling $208,649.68.
Finally, on 12 December 2005, the court entered an order awarding Oliver his
attorney's fees and expenses. Coca-Cola and Broadspire now appeal the district
court's judgment, both on the merits and as to damages.

* * *

Under the arbitrary and capricious standard of review, the plan
administrator's decision to deny benefits must be upheld so long as there is a
"reasonable basis" for the decision. Jett v. Blue Cross & Blue Shield of Ala., Inc.,
890 F.2d 1137, 1140 (11th Cir. 1989). The district court's review of the plan
administrator's denial of benefits should be limited to "consideration of the
material available to [the administrator] at the time it made its decision." Id. To
determine whether the administrator's denial of benefits was arbitrary and
capricious, we begin with the language of the Plan itself. See 29 U.S.C. §
1104(a)(1)(D) (stating that an ERISA fiduciary shall discharge its duties "in
accordance with the documents and instruments governing the plan insofar as such
documents and instruments are consistent with the provisions of [ERISA]").

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